BitGo, a crypto infrastructure provider, is preparing to enter the stablecoin market by introducing a dollar-backed reward coin called ‘USDS.’
The digital asset custodian at Token2049 in Singapore announced the launch on Wednesday. Last month, the Monetary Authority of Singapore (MAS) granted the platform the Major Payment Institution (MPI) license.
BitGo intends to implement its reward-bearing stablecoin in January 2025, as stated in the announcement. Interestingly, USDS is a stablecoin that operates on the principle of “open participation,” which means that institutions that provide liquidity are rewarded.
The USD-Standard (USDS) empowers the community by “democratizing the stablecoin experience and deploying rewards,” as the release states.
“USDS is intended to challenge the current dynamics of the stablecoin market, with a particular emphasis on the dominance of single-issuers such as Tether and Circle.”
The reward system of USDS is distinct from traditional stablecoins in that it allocates up to 98% of earnings to participants who contribute to the ecosystem.
Mike Belshe, CEO of BitGo, stated that the primary objective of USDS is to establish a more equitable and transparent system that encourages innovation and, most importantly, compensates those who construct the network.
“The genuine value of a stablecoin is derived from the individuals who utilize it, the liquidity they offer, and the access points for interchange.”
What distinguishes USDS from conventional stablecoins?
Cash, overnight repos, and short-duration T-bills entirely back Bitgo’s new 1:1 USD-backed stablecoin. This would guarantee minimal risk and high liquidity.
In addition, the stablecoin would publish real-time proof-of-reserves on its website and execute monthly audits by top-tier accounting firms.
BitGo observed that USDS is accessible to a global audience, which includes institutions, individuals, and DeFi platforms. “BitGo allows eligible participants, including liquidity providers and institutional exchanges, to register and begin earning rewards.”
BitGo thinks implementing rewards throughout the network would foster widespread adoption and substantial liquidity. This would subsequently establish a stablecoin ecosystem that is more resilient and robust.
Furthermore, BitGo intends to include USDS stablecoin on all exchanges and anticipates accumulating $10 billion in assets by the conclusion of 2025.